Credit Facility Agreement

16 December 2004


PRIVATE AND CONFIDENTIAL College Green Business Centre - ------------------------ P.O. Box 145 The Directors 33 College Green Castle Brands Spirits Company Limited Dublin 2 1st Floor Victoria House Telephone: 01 7025400 Haddington Rd Facsimile: 01 7025235 Dublin 4


www.ulsterbank.com


Dear Sirs,


Further to our recent discussions, I am pleased to advise the following facilities have been approved for your Company. The agreement is between Ulster Bank Ireland Limited ("UBIL") and Ulster Bank Ltd ("UB"), (together, the "bank") and the Borrower specified below whereby the Bank agrees to make available to the Borrower the following facility/ies on the terms and subject to the conditions herein contained:


BORROWER: CASTLE BRANDS SPIRITS CO LTD. LENDER - -------- ----------------------------- ------ FACILITY A: OVERDRAFT UBIL FACILITY B: LOAN UBIL FACILITY C: C & E GUARANTEE UBIL FACILITY D: FORWARD CURRENCY DEALING RISK FACILITY UBIL


BORROWER: THE ROARING WATER BAY SPIRITS COMPANY (GB) LTD - -------- ----------------------------------------------


FACILITY E: OVERDRAFT UBL FACILITY F: LOAN UBL FACILITY G: C & E GUARANTEE UBL


CASTLE BRANDS SPIRITS CO LTD


FACILITY A OVERDRAFT - ---------- --------- AMOUNT: EUR E400,000 (Four Hundred Thousand Euro)


NATURE & PURPOSE: Working capital.


INTEREST: Interest is payable on all Bank accounts at regular intervals to be
decided upon by the Bank. The present charging period is quarterly in
August, November, February and May at a rate subject to variation at
the discretion of the
2


Bank. The present rate applicable for this facility is the Bank's AA2
rate less .5%, currently 7.25% per annum variable.


REPAYMENT: This Facility is repayable on demand. However, in the absence of
demand this facility is available until the review date 14th December
2005. Renewal of overdraft status will be conditional upon the
current account showing regular fluctuations to credit during the
period of sanction subject to a minimum of 30 days in any 12-month
period. An account which operates in debit at or near the sanctioned
limit for the greater part of the year and then turns to credit for a
short period does not comply with Bank's concept of overdraft.


Accounts which exceed an agreed overdraft facility without prior
arrangement with the Bank incur surcharge interest of 0.75% per
month (minimum E1 per month on the excess).


FACILITY B LOAN - ---------- ---- AMOUNT: EUR E190,000 (One Hundred and Ninety Thousand Euro).


NATURE & PURPOSE: Continuation of existing Loan account at reduced level, repayable on
demand


INTEREST: Interest is payable on all Bank accounts at regular intervals to be
decided upon by the Bank. The present charging period is quarterly in
August, November, February and May at a rate subject to variation at
the discretion of the Bank. The present rate applicable to this
facility is the Bank's Prime 5 rate, minus 0.125% equating to a rate
of 4.835% per annum variable as at today's date.


The under mentioned repayment includes an allowance for interest and
in the event of a large upward movement in the interest rate the Bank,
at its discretion will alter the repayments or alternatively make any
adjustment necessary at the end of the term.


REPAYMENT: In the absence of demand and assuming full drawdown, repayments will
continue at E6,377 per month for five years from original draw down in
September 2002.


You have the option of repaying the outstanding balance at any time
during the term of the loan. Also, this facility is subject to formal
review in line with the annual review of your overdraft facility.
3


FACILITY C CUSTOMS & EXCISE GUARANTEE - --------- AMOUNT: While the nominal amount of the Guarantee is for E35,000 it is
understood that the Banks risk is double this amount i.e., E70,000.
---- NATURE & PURPOSE: Continuation of existing Guarantee facility in respect of the
deferment of duties, taxes, levies and charges or any amounts due the
Revenue Commissioners.


REVIEW/EXPIRY: This facility may be withdrawn on the demand being made by the Bank
...